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Lurita Doan, administrator of the General Services Administration, offered a bleak description of the agency’s condition in June, the month she began her new job at GSA.

“When I came onboard, GSA had experienced one of its worst years in its 58-year history,” Doan said. “Our customers were leaving, our budget was a mess, we flunked our audit, our morale was at an all-time low, and our annual revenues had plunged $4.5 billion.”

Since then, conditions at the agency have improved, by her own account. “That’s because we have had the courage at GSA to face our most pressing problems,” Doan said. GSA received a clean audit in November, and a reorganization of the agency is progressing.

However, Doan has not had an extended honeymoon in her first six months. Some of her decisions have created controversy in the federal contracting community and aggravated other agencies and, most recently, lawmakers. Describing herself as no Washington, D.C., insider, Doan has earned a reputation for being outspoken and unbridled in some of her actions.

“Lurita is a bit of a lightning rod,” said Jim Williams, commissioner of GSA’s Federal Acquisition Service.

Doan defends her actions as necessary for streamlining an inefficient federal procurement system.

A component of that system is GSA’s assisted-services business, in which the agency’s employees have a hands-on role in helping other agencies plan and manage large procurements. Revenue from that business fell 40 percent from fiscal 2004 to fiscal 2006, from $7.2 billion to a projected $4.3 billion, according to documents Federal Computer Week obtained.

Before Doan took over as administrator, GSA officials received more bad news about the agency’s weak financial condition. Fiscal 2006 revenue for GSA’s Information Technology Fund was down 26.7 percent, or $597.5 million in January, compared with the agency’s forecasted numbers. All of GSA’s regional offices reported revenue shortfalls. The 11 regions reported $1.6 billion in revenue for the IT Fund as of January. Their revenue goal was $2.2 billion.

There were several reasons for the shortfall, said Marty Wagner, acting deputy commissioner of FAS. One factor was inappropriate growth. GSA had a rapidly growing contract business until 2004, Wagner said. But some contracts failed to meet regulations.

Another factor was a shift in agencies’ buying behavior. GSA had been under a harsh spotlight after its inspector general investigated the agency’s client support centers and found that employees in many of those offices had been violating various federal contracting rules. Some blame GSA’s loss of business on a subsequent Get It Right program, which they say emphasized contracting compliance at the expense of customer service. That emphasis slowed GSA’s response to agencies’ needs, and customers found alternatives to GSA.

Doan was appointed in June to rebuild GSA and restore its former reputation as the premier federal procurement shop.

At her nomination hearing, she told lawmakers that GSA must improve its customer focus, make timely and conclusive decisions, and create a culture of change to meet and adapt to customers’ needs. Doan said she knew that GSA’s largest customers were unhappy and that many had already taken their business elsewhere, but she vowed to win them back.

An entrepreneur at heart, Doan said she wants to prove she can run a federal agency like a business. When she found GSA had a deficit of more than $100 million, she asked the agency to make a 9 percent across-the-board cut in spending.

Doan included the Office of the Inspector General in her request for budget cuts. She also asked the IG’s office to cut back on the number of pre-award audits it performs. But Doan angered lawmakers when she announced that she intended to transfer those audit responsibilities to small, private-sector auditing firms because she wanted them to have a larger piece of the federal contracting pie. Angry lawmakers promptly sent letters asking her to leave the system alone.

A small-business advocateDoan is “tampering with a system that works well, all to alleviate the ‘stress’ of corporations that have attempted to overcharge the taxpayer,” several lawmakers wrote to her in December. One of the signatories was Rep. Henry Waxman (D-Calif.), incoming chairman of the House Government Reform Committee.

Since her confirmation, Doan has consistently advocated for giving small businesses a larger share of government contracting dollars. She has dismissed the notion that small businesses are unable to function as prime contractors on large contracts.

To make her point, she set aside for small businesses a GSA infrastructure contract estimated to be worth as much as $500 million. But some small-business owners have shied away from bidding on the contract, which Doan said she finds frustrating.

“Rather than looking at it as something that is too big, the minority business community needs to say, ‘Our time has come,’” Doan said.

As a former owner of a small IT business, Doan said she intends to offer small businesses plenty of opportunities to work for GSA. For example, she foresees GSA spending $720 million in fiscal 2007 with veteran-owned companies through the Veterans Technology Services governmentwide acquisition contract.

“It’s not even close to what you can expect from the GSA in the future,” she added, referring to the amount of business she wants to direct to veteran-owned small businesses.

Doan began reorganizing GSA in October after President Bush signed the GSA Modernization Act, which created the Federal Acquisition Service by combining the Federal Technology Service and the Federal Supply Service. It also created the Acquisition Services Fund to replace the IT Fund and the General Supply Fund.

Doan speaks openly about her desire to reduce the number of federal contracts and consolidate federal procurement activity. One of the outside contracts that Doan said she would like to eliminate is NASA’s Scientific and Engineering Workstation Procurement GWAC. She has asked Paul Denett, administrator of the Office of Federal Procurement Policy, to stop NASA from proceeding with a SEWP IV contract, modeled on the successful SEWP III program. Denett said he has not made a decision on that request, but he said he will rule on it soon.

With her campaign against SEWP and other outside contracts, Doan has irritated many in the federal contracting community who want GSA to organize itself before meddling with other agencies’ contracts, such as SEWP.

But Doan isn’t fazed by opposition to her decisions. In a recent speech, she told an audience at a conference hosted by the National Contract Management Association, that when she was 7 years old, she was one of the first black students to attend newly integrated New Orleans schools.

“I’m used to blows, I’m used to harsh, angry words and even thrown bricks,” she said. “Third-grade girls in particular are a lot tougher than you know.”